Free Present Value Pension Estimator (Life Expectancy Method)

This free present value pension estimator uses the “life expectancy” method to calculate the present value of future pension payments that end on your life expectancy date. It can be used for very rough, ballpark approximations of pension present value.

The life expectancy method is an inherently inaccurate way to calculate the present value of a pension because it does not take into account the chance that you might live shorter or longer than your exact life expectancy. For an accurate present value, you must use an actuarial calculator, which makes many thousands of calculations.

In the examples of calculations given by Altschuler and Kelley in Value of Pensions in Divorce, the “life expectancy” method of calculation gives present values that range from about 20% too high to 20% too low. Thus, if the true present value of your pension is $500,000 (as computed with actuarial calculations), a life expectancy present calculator might give you a number such as $400,000 or $600,000. Unfortunately, you won’t know if the life-expectancy present value is mistakenly high or mistakenly low. In other words, if the life expectancy calculator gives a present value of $600,000, for example, the true present value could be over $700,000 or under $500,000, and you won’t know which is the case.

This free calculator includes sophisticated calculations of COLA’s (cost-of-living-adjustments) based on the information you enter under Question #6, below.

The calculator does not work with Internet Explorer. Please use a different browser.

  Disclaimer. Before filling out the form, check this box to indicate that you understand and agree with the disclaimer below.

The calculator on this page does NOT provide actuarial calculations. It provides ballpark approximations of present value using the life expectancy method of calculation. The information contained within this website is provided for informational purposes only and is not intended to substitute for obtaining professional legal or accounting advice. is not associated with any lawyer, actuary, or accountant, and it does not provide legal or accounting advice.

6a) My pension has no COLA. (If your pension has an occasional, one-time COLA, you should choose this one.)  Many pensions today have no COLA. If you have a COLA that will only be applied once or twice, perhaps, then choose 6a).
6b) My pension has a fixed dollar-amount COLA. Many pensions have a COLA that is a fixed dollar amount, i.e., the same, fixed amount each year. Some pensions call this “simple interest” on a specific amount, e.g., 2% of your first annual benefit. Enter the amount of this COLA and indicate how many years and months after retirement the COLA will first be applied. Many pension COLA’s start one year after retirement or on a specific date after a one year waiting period after retirement. Some pension COLA’s have five year waiting periods or waiting periods that depend on your specific age or date of hire.
The first COLA adjustment to my pension will be applied years and months after my retirement date.
6c) My pension has a COLA that is a percentage of the entire benefit. This is for COLA’s that have compounding interest. If your COLA has simple interest, you should choose 6b). If your compounding COLA interest rate varies from year to year, you might use a percentage that is the average from the last 5 years or slightly lower. Compounding interest can increase future benefits dramatically, so choosing a high percentage rate can exaggerate the future benefits, and present value, of your pension.
The first COLA adjustment to my pension will be applied years and months after my retirement date.
6d) For some pensions, the cost of living adjustment applies to only part of your entire annual benefit. My pension has a COLA that is apercentage of PART of my total benefit amount. Some large pension systems, such as the MA State Employee Retirement System, have COLA percentages that apply to only part of the benefit. In MA, for example, pension benefits receive a 3% COLA but with a maximum benefit of $390 per year. These COLA’s can function like compounding interest COLA’s until a certain threshold is reached and then function like a fixed dollar amount. If one has a MA pension that starts at $10,000 per year, it will receive a compounding COLA of 3% until the annual benefit is greater than or equal to $13,000. After that, it will receive a fixed amount COLA of $390 annually.
The first COLA adjustment to my pension will be applied years and months after my retirement date.

Please report any bugs to me and please pass along suggestions on how to make it more comprehensive or user-friendly: [email protected]

To make changes, simply scroll up and make changes, then press "Calculate now" again.
Present value:
Calculated life expectancy based on 2014 Social Security Period Life:

Your inputs:

Age now:
Projected monthly benefit:
Projected COLA:
Discount interest rate: